Comments for Irvine Housing Blog

Comment on Open Thread 7-4-2009 by Nancy

Nancy — Sun, 05 Jul 2009 21:57:56 -0700

The scare tactics of politicians is ALWAYS for a cause, an unstated agenda.

China wails and cries for a different reserve currency than USD, and yet it continues to peg to USD and maintain undervalued currency, giving it an unfair advantage to export more to the US than they import from us; that’s partially how they manage to stay so wealthy - they have $1.2 trillion currency reserve, highest of any country (US of course, has no reserves, we print USD when we wish, and we operate under debt, highest of any country in the world, but we’re the largest economy in the world).

Japan’s national debt is 200% their GDP (think of this as debt/income ratio). US and UK’s will soon be 100%. Europe slightly less. We’re not the worst debt/GDP ratio (Japan is). But we’re not the best either. Question is when will the ratio improve… and under recent Democratic administrations we’ve seen major improvements in the past.

Japan’s in much worse shape - their banks are practically zombie and getting in worse shape than before. They’ve been in deflation since the ‘98 Asian crisis, with their 100-year mortgages and home prices deflating for more than a decade. Even Europe has more toxic debt (their banks leverage ratios were much greater than ours) than we do.

The major difference b.t. US and Japan is that their banks don’t write down debt… we are by bank laws required to do that (hence the massive bailouts to correct their balance sheets). In 90 days after a home goes into default, US banks must write the WHOLE loan off as a loss. IF AND ONLY IF they can sell it later, they show profit for the sale amount minus expenses. That approach cleans up bad banks quickly… and functioning banks are required for a healthy economy; functioning banks will lend, zombie banks will just sit on bad debt and wait for inflation to eat away their carryover debt load. Theoretically, banks should show excellent profit when they sell their inventory of foreclosed homes.

Don’t give up on our system - it’s still the world’s envy, and there is no currency with the liquidity of US dollars to replace it. The dollar will likely continue to play a major role even in a basket calculation such as SDRs which are being proposed as USD’s replacement for reserves.

******************
And the point is?
******************
When China asks for an alternative to USD as reserve currency, ask yourself who is MOST likely to lose from such a change? China.

China’s $1.3 trillion reserves will devalue. USD will devalue. China will have to unpeg from USD and float to a higher value, making its exports less competitive.

US middle class manufacturing jobs would return to the US. US consumerism of imported materials would be challenged when the USD devalues, imports would get more expensive. You’d more likely buy a Ford than a BMW, which is all good for the middle class. I reckon the main objection is that we would lose world power status over time… can’t afford to have a standing army when you can’t publish all the debt you wish. I wouldn’t lose sleep on that - can’t imagine foreign forces wanting to confront the famed Hill Billy (or Texas) Militia Men.

But is that going to happen? I reckon not. A country with our resources will always work behind the scenes to ensure it retains its unique status in the world. Question is if it will behave itself in a way that will extend its dominance or reap short-term rewards in exchange for long-term prospects.

***********************************************
What does that have to do with the price of tea in China?
***********************************************

Don’t wager a penny on news of end-of-the-world. It’s always a scheme for an ulterior agenda. Question is, what is that agenda.

Comment on Open Thread 7-4-2009 by Nancy

Nancy — Sun, 05 Jul 2009 21:15:25 -0700

Your Moment of Zen:
===================

Do you market-time purchase of a car?

When you purchase a $40K luxury car (with a life expectancy of 10 years), it depreciates by 10% as soon as you drive it off the seller’s parking lot. Do you grieve that monetary loss? Do you call the purchase catching a falling knife? Was the bank at fault for lending you the loan for the car? Do you check the blue-book value of your car every week to see how poorly this (consumable) investment is doing?

And then do you lament after realizing you’ve lost $10K in 2 years, and sell the car when you realize it’s going to lose another 10% the next year or two?

What is fundamental price for a car? Shall we create an Irvine Car Blog?

Homes are multi-generational assets unlike disposable cars that we buy more than happily and then throw into the junkyard in a few years; homes are inflation-protected assets and housing is a human necessity. Homes are where your grandchildren will build memories that will indelibly shape their characters and influence later generations who you will not live to see in your lifetime.

Home prices are all about demand and supply… there’s no formula to what’s reasonable price for them. A reduction in price does not prove any theory correct, it only proves less demand. An increase in price proves an increase in demand. If there’s no buyers for a luxury home, it will have to cut its price until there is demand.

And you can positively influence demand by refusing to dump your home in a depressed market.

When is a good time to buy your PRIMARY HOME which you intend to retain long-term? When you have the money, and someone is selling your desired home. It’s a practical choice. You will not be humored for having bought in 2006, unless you sell now because you think it’s going to go down another $100K next year. Those selling from such greed are the only ones worth public humor.

If you are looking to buy and expect to make a killing profit from your transaction, as most here have expressed, then maybe we should call this the Irvine Flipping Blog instead.

Comment on Open Thread 7-4-2009 by newbie2008

newbie2008 — Sun, 05 Jul 2009 18:53:08 -0700

Nancy, Your making a case for not purchasing at this time with NR. Are you now a market timer? NR is calling for another drop in the housing prices.

Comment on Open Thread 7-4-2009 by newbie2008

newbie2008 — Sun, 05 Jul 2009 18:50:11 -0700

dafox. You nailed it with the question: Is it sustainable?

I have seen $1000 per month car parking spaces in downtown Boston twenty years ago, but none in OC. Has anybody seen an Irvine parking spot near that price? Irvine is neither downtown Boston nor downtown Tokyo. I’ve heard lots of examples where the parents will buy a place for the kid with all cash in Boston, but only few in Irvine. Irvine may be special, but it’s not Boston or Tokyo.

I notice that many of the properties no longer have the purchase history on Redfin and Zillow. An informed public too dangerous?

One large cash purchased pulled out of an Irvine SFU. Her mother essentially called in a money pit to the daughter who wanted to purchase it.

Comment on Open Thread 7-4-2009 by Cara

Cara — Sun, 05 Jul 2009 16:48:10 -0700

It’s impressive isn’t it? See this blog does have real value.

I think the more recent stuff he just hasn’t gotten the data on. IR keeps saying that this spreadsheet shows DPs going down over time, so it’ll be interesting to see if graphically he can back that up.

(I’m assuming that the posts higher up were not you. I don’t know if there’s a way that the webmaster here can prevent that. I would make an account here if I were you as a starting point, and then perhaps they’d be able to fix this problem).

Comment on Open Thread 7-4-2009 by lawyerliz

lawyerliz — Sun, 05 Jul 2009 16:38:37 -0700

I’m seeing some all cash in South Fla—but at
the 50k level to 150k level. Which, I gather, wouldn’t buy a rat hole in Cali.

Comment on Open Thread 7-4-2009 by mav

mav — Sun, 05 Jul 2009 16:27:04 -0700

“The real question is: is this amount of cash purchase money sustainable?”

.... the follow-up question is what is the willingness to pay for the leftover cash wealthy buyers as those with cash get absorbed into the market… i think irvine will always attract cash but the willingness to pay will decline…

i take the controversial belief (contrary to IR) that in a market with some stability… GRMs will differ from neighborhood to neighborhood just like a P/E ratio will differ on a stock due to future outlook…

Comment on Open Thread 7-4-2009 by mav

mav — Sun, 05 Jul 2009 16:02:24 -0700

where is the population growth coming from? is it from the Stanford Lawyers who are unsure of whether it’s a good idea to bring a child into this world…. or is it coming from another segment?

Comment on Open Thread 7-4-2009 by dafox

dafox — Sun, 05 Jul 2009 15:58:10 -0700

The real question is: is this amount of cash purchase money sustainable?

I’m not entirely sold that the new buyers are ‘serious high capital savers’. Some, maybe. Most? I think thats called mommy and daddy helping out.

Comment on Open Thread 7-4-2009 by Nancy

Nancy — Sun, 05 Jul 2009 12:28:07 -0700

I finally got around to reviewing IR’s spreadsheet for home closings in Irvine, which clara has requested. What a pleasant surprise. I had heard banks not lending to self-employed people, and requiring 20% or higher downpayments, but the plethora of all-cash buyers was startiling, especially in recent months.

Many of the homes which were labeled with “no data” in the loan field I was aware had received full-cash offers, so the median/mean may be even greater than 38%/28% downpayment. This spreadsheet reinforces my observation that the new buyers are serious high-capital savers… having no qualms to risk capital equivalent to 100% of the price of the home. I can only imagine that this can improve the long-term financial fabric and stability of these neighborhoods.

Comment on Open Thread 7-4-2009 by lawyerliz

lawyerliz — Sun, 05 Jul 2009 11:55:36 -0700

Europe is really shrinking.

We are not growing without immigration, but
are much closed to the replacement 2.1 then they
are.

Comment on Open Thread 7-4-2009 by MalibuRenter

MalibuRenter — Sun, 05 Jul 2009 10:27:54 -0700

One big difference between the US and Japan is population increase. The US is growing. Japan is shrinking.

Comment on Open Thread 7-4-2009 by Nancy

Nancy — Sun, 05 Jul 2009 08:11:44 -0700

hehe… if US does have Japan-like fate and housing deflates over a decade or more, then perhaps we may be able to rent a parking spot for $2000/month, just like in Japan’s prime locations.

That’s what happens when interests are kept close to 0 for over a decade, which the Fed may just have to do, as long it possibly can, to produce inflation.

Comment on Open Thread 7-4-2009 by mav

mav — Sun, 05 Jul 2009 06:17:26 -0700

In sum there are 2 possibilities:

1. The deflation of the US Debt Bubble will continue to devastate assets for at least a decade. Deflation in all assets including the human kind: jobs/incomes.

2. Miraculously US Debt expands, and only those with access to Option Arms and HELOCS can buy food….. everyone else will be priced out of eating….by some act of god the new debt bubble is sustainable, people who have access to HELOCs won’t need jobs and it will be a good thing because there won’t be any jobs.

Comment on Open Thread 7-4-2009 by Nancy

Nancy — Sat, 04 Jul 2009 20:42:10 -0700

===============================================
The Real Threat to the American Dream: the Coming of the Second Major Crisis of the 21st Century;
================================================

Audience, this is MUST READ material if you want to have a much grander perspective than simply market-timing a home purchase:

The excerpt below is directly from Dr. Doom’s (Nouriel Roubini’s) website. As some of you know, Dr. Roubini foretold of the global credit crisis and its 12-step path when he was chided by world economists. He is an excellent source for Truthful Economic Analysis, and has the credentials and consistent trackrecord to back it. He does not Market-Time, nor is he invested in currency or equities, and hence earns my sincere respect, and belief that he is a disinterested and qualified analyst.

The implications of the below to your financial decisions is much more immense than trying to outperform the “Housing Market” by a few percent by market-timing:

“THE 19th century was dominated by the British Empire, the 20th century by the United States. We may now be entering the Asian century, dominated by a rising China and its currency. While the dollar status as the major reserve currency will not vanish overnight, we can no longer take it for granted. Sooner than we think, the dollar may be challenged by other currencies, most likely the Chinese renminbi. This would have serious costs for America, as our ability to finance our budget and trade deficits cheaply would disappear.

Traditionally, empires that hold the global reserve currency are also net foreign creditors and net lenders. The British Empire declined and the pound lost its status as the main global reserve currency when Britain became a net debtor and a net borrower in World War II. Today, the United States is in a similar position. It is running huge budget and trade deficits, and is relying on the kindness of restless foreign creditors who are starting to feel uneasy about accumulating even more dollar assets. The resulting downfall of the dollar may be only a matter of time.”

This excerpt holds very serious premonitions from Dr. Doom.

What do you think will be consequence for American “real” assets? IMHO, banks just won’t lend to the average Joe Shmoe.

They may not increase loan rates significantly, since they can manipulate the GSE market by buying GSE debt, as they have been doing.

Buying long-term GSE debt is a back-door way of inflating (devaluing) the currency; the world doesn’t care much when the Feb buys GSE mortgages, it minds quite a bit when it buys Treasuries (that’s called “printing money” from thin air, literally). Isn’t buying GSE debt (that is, loans that are under-water or defaulted) equivalent to building castles in the sky (printing mortgage contracts and inventing mortgage-backed assets)? You “betcha” it is. It ultimately yields the same net effect - increase in money supply (thanks to those who foreclose).
You see how the writeoff is paid by us twice? Once through a hike in taxes to cover the bailouts to the banks, and once again through increased inflation and cost of goods resulting from the increased money supply. The Jonses are truly the real winners of this game.
How will this affect home prices? Places where banks are reluctant to lend, banks will be even more reluctant to lend. That may include the speculative high-end market that bought at peak prices. The low-end market with high turnover, I can’t imagine banks rushing to make a killing there either. The least fortunate are always the first to pay the consequences of high inflation, they just have little or no monthly budget for the impending gas&food;&rent; hikes due to inflation. The mid-range non-speculative market, well, let me consult my crystall ball. But I wonder if that’s the market that is bringing foreign capital to the US, something VERY beneficial to the US predicament of balancing foreign capital outflow (long-term treasury and GSE debt being dumped by Sovereign Wealth Funds (China/Japan/Russia/Gulf…). It’s heavily to the US/Fed’s interest to keep that bubble or whatcha-call-it, going.

What’s my prediction for the housing market in that light? Overall, places where foreign capital and cash inflow occur will hold value better than sub-prime (low-end) or high-end areas. But don’t expect to make a killing out there anymore… once US loses reserve status, ALL OUR LIFESTYLES WILL CONSIDERABLY CHANGE.

In sum: if you’re going to buy, buy small and efficient; let the Jonses live large. Don’t expect homes to go up fast, expect the banks to keep tight leashes on the Jonses (foreclosing on them readily) and thereby prevent further losses.

Comment on Desert Willow, Columbus Grove, Irvine by newbie2008

newbie2008 — Sat, 04 Jul 2009 19:45:05 -0700

Lawyerliz wrote:
“Gosh, I thought you all would be mad at me. “

For what?

Unemployment numbers are not that meaningful unless your one of those numbers.
Comparisons of unemployment rate and “non-seeking/discouraged” rate would be more meaningful to compare countries.

Comment on Desert Willow, Columbus Grove, Irvine by newbie2008

newbie2008 — Sat, 04 Jul 2009 19:30:59 -0700

Nancy,
Maybe you have the ability to lose $100,000 from a peak purchase price, but the TR condo was FC on only 9% underwater (~$80,000). You can tell the FCed TR family or to other families underwater by 50% what you wrote. Layerliz and winstongator can cite example, but I sure you can log on to the MLS and look into property underwater.

True premium areas are more resistant to downturns than subprime areas, but they are not immune. Recovering from buying at the peak is hard and may take a life time. Inglewood (city) and Adam St om L.A. were once prime areas. Poor person that purchased at the peak and sold 30 to 40 years later.

Even without a working crystal ball, I can say that playing Russian Roulette is a bad idea. Buy at unsustainable prices are unwise in the long run. Unsustainable prices benefit those that obtain a percentage of the sales price no matter what happens to the buyer. RE agents and HM brokers left the buyers and taxpayers holding the bag.

A better payment model for the RE agents and HM broker would be partial payments until completion of the loan. Dramatically reduced commissions for FC’s.

As for bailout and losing seasoned financial employee, one example that I know of is a NorCal bank employee in the stock/mutual fund sales side, retention bonus of million for a 6 year more years. He passed on it (hoping for a better offer), but now the new offer is $60,000 which he took. He has a BA degree, but it’s all BS. Buy before it goes up.

Comment on Open Thread 7-4-2009 by Nancy

Nancy — Sat, 04 Jul 2009 18:56:49 -0700

Sulfer? that’s actually a Chinese fart (or a lot of Chinese farts) trapped in gypsium.

Did I fail to mention that the real estate trailing a flatulent Chinese walking roundabout is never in high demand, and therefore not Prime? Fundamental values apply therein.

Comment on Open Thread 7-4-2009 by Nancy

Nancy — Sat, 04 Jul 2009 18:50:13 -0700

Fear not. Trans fats from McDonalds french fries when combined with supersized Pepsi protects you against cancer from radioactive Chinese gypsium.

Comment on Open Thread 7-4-2009 by Dan in FL

Dan in FL — Sat, 04 Jul 2009 14:43:28 -0700

Some of ours are going to online sales.

Comment on Open Thread 7-4-2009 by lawyerliz

lawyerliz — Sat, 04 Jul 2009 12:41:53 -0700

Hi, No Vas.

Comment on Open Thread 7-4-2009 by no_vaseline

no_vaseline — Sat, 04 Jul 2009 12:17:14 -0700

welcome back liz!

Comment on Open Thread 7-4-2009 by tonye

tonye — Sat, 04 Jul 2009 11:09:43 -0700

LA Times, today:

“Another Wave of Foreclosures”

http://www.latimes.com/business/la-fi-foreclosure4-2009jul04,0,5145254.story

Comment on Happy 4th of July 2009 by ockurt

ockurt — Sat, 04 Jul 2009 11:07:20 -0700

This is actually one of my favorite buildings in Irvine. I always check it out when I’m driving down Alton or Harvard, and still impressed by its design.

Thanks for posting IR. Have a safe one!

Comment on Open Thread 7-4-2009 by lawyerliz

lawyerliz — Sat, 04 Jul 2009 09:44:14 -0700

We usta have foreclosure sales out on the
steps, but now we got civilized and they are
in a room. I liked it outside.

Comment on Open Thread 7-4-2009 by lawyerliz

lawyerliz — Sat, 04 Jul 2009 09:42:27 -0700

I think the smelly stuff has sulfur in it.

Hydrogen sulfide?

But it has caused health concerns.

I hate Borat.

Comment on Open Thread 7-4-2009 by lawyerliz

lawyerliz — Sat, 04 Jul 2009 09:39:50 -0700

There was at least one US manufacturer who used
wallboard with sulfur in it. But I don’t think
anyone but the Chinese thought it was ok to
send out stuff that was radioactive.

Why are we still buying from China?

Comment on Open Thread 7-4-2009 by newbie2008

newbie2008 — Sat, 04 Jul 2009 09:32:01 -0700

What isotope and at what level?
I read about a bad smell from some drywall but have not personally smelled bad lots. Should we bring a Geiger counter while house hunting? Radium also comes from the ground in many area but needs special collection methods to detect it.

One building that I worked in was also used for the Manhattan Project. The whole building was “radioactive.” Turned out to be the natural radioactivity from the granite (in the walls). Now, think of granite counter tops. Are they dangerous, for most I don’t think so. Who knows, the radioactivity might kill the bacteria in the kitchen :] Drywall may pose more risk because a powder is formed after installation and remodeling.

Comment on Happy 4th of July 2009 by tonye

tonye — Sat, 04 Jul 2009 08:53:11 -0700

The Irvine Taj Majal… at only $1000 per sq foot.

Clock tower, plenty of bathrooms, office space and your own police force.

Make an offer.

Comment on Open Thread 7-4-2009 by LC

LC — Sat, 04 Jul 2009 08:46:15 -0700

While you are watching those Chinese fireworks, think of the glow that your new house is giving you…(from the LATimes:)

Reporting from Los Angeles and Wuhan, China—The final years of the U.S. housing boom and a disastrous series of Gulf Coast hurricanes created a golden opportunity for Chinese drywall manufacturers. With domestic suppliers unable to keep up with demand, imports of Chinese drywall to the U.S. jumped 17-fold in 2006 from the year before.

[...]

Health concerns are raised over the imported building material. Some drywall made with radioactive phosphogypsum, a waste byproduct, was shipped to the U.S. by at least four Chinese-based firms.

[...]

“I don’t know exactly how much phosphogypsum we use, but in total we process several hundred tons of all kinds of gypsum every year,” he said. “We can get raw materials for our products at very low prices because they are mainly industrial waste.”

http://www.latimes.com/business/la-fi-drywall4-2009jul04,0,5662497.story

[...]

Miami-based Lennar is rebuilding their home, but the company has been sued by other homeowners, and it in turn has filed lawsuits against manufacturers and sellers of drywall.

Lennar is a major builder in California, which the U.S. Consumer Product Safety Commission says is one of 13 states where residents believe their health symptoms or damage to metals in their homes are linked to Chinese drywall.

http://www.latimes.com/business/la-fi-drywallside4-2009jul04,0,1536168.story

Comment on Desert Willow, Columbus Grove, Irvine by tlc8386

tlc8386 — Sat, 04 Jul 2009 08:24:54 -0700

I am also from this area and you are right the high quality jobs left South Fla. a long time ago. And it just as could happen here in Irvine as well. It did back 1989 when Aerospace left The OC.
Irvine had a very large finance industry here as well and many places have closed down. Some are still alive and well as long as we have low mortgage rates. When those eventually go back up you will see more job losses because of less flipping, refinancing, buying of homes.

http://economy.freedomblogging.com/2009/06/30/oc-ranks-5th-in-us-for-job-losses/

Until we turn around the job losses this market will continue to go down.

Comment on Desert Willow, Columbus Grove, Irvine by LC

LC — Sat, 04 Jul 2009 08:21:15 -0700

A “greenbelt view” could mean that most of your windows look into the back of a hillside about 30 feet away, and there are more levels of houses above you.

Comment on Desert Willow, Columbus Grove, Irvine by lawyerliz

lawyerliz — Sat, 04 Jul 2009 05:18:34 -0700

Gosh, I thought you all would be mad at me.

Comment on Desert Willow, Columbus Grove, Irvine by winstongator

winstongator — Sat, 04 Jul 2009 05:07:52 -0700

Broward county, where I’m from, has some condo/townhouses selling REO for 75-80% off peak, and new 06/07 construction selling 50% off peak, and 02/03 selling below their new prices. I know of at least 2 sellers that sold at 45% lower than their purchase price but ate the loss AFAIK. Broward-Dade-Palm Beach is about as bad as it gets.

What initially clued me in to the bubble was the lack of enough high paying jobs in that area to justify the housing prices. I knew what people did for a living and couldn’t figure out how or why they could afford homes at those prices. Obviously many couldn’t, and with an area so dependent job-wise on real-estate it’s been hit doubly hard.

Comment on Desert Willow, Columbus Grove, Irvine by Nancy

Nancy — Fri, 03 Jul 2009 22:59:32 -0700

We call them Fundamentalists (price/income ratio subscribers), and Market Timers, those waiting to hear the Great IR tell his loyal subjects to BUY!.

Remember, *Prime* is defined by what is in Demand, and what is *Prime* will NEVER be at Fundamental value, no matter how much we wish it or attack it by showing losers herein this blog. Prime may depreciate from peak, but *relatively* less than other areas. In areas where people sell once every 30 years, “peak” is meaningless to homeowners; noone loses sleep over losing $100K from peak, since they don’t HELOC or need that money. Prime will NEVER be at *absolute* Fundamentals, so using this approach for market-timing buying may get you fast into Compton ganghouse before it sinks below fundamentals.

Let’s keep waiting for our European Vacation at $1.1 USD/Euro.

BTW, I wonder if IR’d profile the *Prime* home he’d be living in long after his BUY call, for the benefit of your schaedenfreude?

Comment on Desert Willow, Columbus Grove, Irvine by Nancy

Nancy — Fri, 03 Jul 2009 22:36:34 -0700

Again, the above post wasn’t by me, but by a hacker.

IrvineRenter - please consult your IT staff on safeguarding your blog from hackers. A blog that allows hacking cannot function as an honest blog; it’s not worth participating.

Safeguarding the blog is not that hard, really, assuming you wish an “open” forum rather than a hacker’s forum.

Or is this IHB neutralizes opposition?

Comment on Desert Willow, Columbus Grove, Irvine by Laura Louzader

Laura Louzader — Fri, 03 Jul 2009 20:36:52 -0700

Glad to see you back, Liz. How is Miami these days? I miss the place.

However bad it is, it couldn’t be worse than the South Loop of Chicago. Or my nabe on the north side, which is Foreclosure Central of the northland.

And bad is maybe good here. Prices on some properties are approaching rent parity.

Comment on Desert Willow, Columbus Grove, Irvine by tonye

tonye — Fri, 03 Jul 2009 20:24:06 -0700

Sorry, but I doubt their numbers.

In their intro the flippantly make the claim that as many as 50% of California homeowners have negative equity and they offer a link to zillow.

But that link does not support that claim.

A claim which I think it’s simply wildly untrue.

I was interested, but when I saw them make such fallacious claims I got turned off quickly.

Nice thesis, awful research. Give them a D.

Comment on Desert Willow, Columbus Grove, Irvine by tonye

tonye — Fri, 03 Jul 2009 20:17:34 -0700

Yeah, it’s been breeze but we also got the morning cloud cover.

Keeps the weather nice but wrecks the tomatoes. Good for cucumbers and green peppers though.

Comment on Desert Willow, Columbus Grove, Irvine by lawyerliz

lawyerliz — Fri, 03 Jul 2009 19:07:18 -0700

Above asking? Wow.

Comment on Desert Willow, Columbus Grove, Irvine by freedomCM

freedomCM — Fri, 03 Jul 2009 18:54:22 -0700

Don’t let it happen again!

It’s just wrong to only see your comments on CR, and not here.

Comment on Desert Willow, Columbus Grove, Irvine by lawyerliz

lawyerliz — Fri, 03 Jul 2009 18:26:22 -0700

Thanks. I really have to get the password thing straightened out to get on the forums again.

CaliboomsDay soon?

Comment on Desert Willow, Columbus Grove, Irvine by lawyerliz

lawyerliz — Fri, 03 Jul 2009 18:24:40 -0700

Those constraints are gone, totally vanished in South Florida. 9% underwater? A fleabite, a nothingburger, a bagatelle. I’m regularly seeing
45-50% and more underwater.

That 125% refi thing O is suggesting would do
nothing to help my clients.

Comment on Desert Willow, Columbus Grove, Irvine by lawyerliz

lawyerliz — Fri, 03 Jul 2009 18:21:54 -0700

I have been sadly neglectful. It all started when I forgot my password.

Comment on Desert Willow, Columbus Grove, Irvine by AZDavidPhx

AZDavidPhx — Fri, 03 Jul 2009 17:17:39 -0700

beer-thirty, I like that.

Comment on Desert Willow, Columbus Grove, Irvine by AZDavidPhx

AZDavidPhx — Fri, 03 Jul 2009 17:16:55 -0700

I have a strange imagination, I guess.

Comment on Desert Willow, Columbus Grove, Irvine by usctrojanman29

usctrojanman29 — Fri, 03 Jul 2009 16:48:14 -0700

I’ll just wait a few years to buy a home half the size of this one for 1/3 of the price with double the lot size.

Comment on Desert Willow, Columbus Grove, Irvine by IrvineRenter

IrvineRenter — Fri, 03 Jul 2009 14:16:58 -0700

Hi Lawyerliz, it is good to see you again.

Comment on Desert Willow, Columbus Grove, Irvine by ockurt

ockurt — Fri, 03 Jul 2009 13:36:00 -0700

Actually, Inglehood has a lot more black people.

Call me ockirk today.

Comment on Desert Willow, Columbus Grove, Irvine by ockurt

ockurt — Fri, 03 Jul 2009 13:26:37 -0700

You’re killin’ me today Tony!

LOL!

How’s it over there in TR? Getting the nice ocean breeze like we are in NC?

Comment on Desert Willow, Columbus Grove, Irvine by ockurt

ockurt — Fri, 03 Jul 2009 13:23:02 -0700

Depends where you’re at. IE maybe.

Irvine not really…I just sold my condo for above asking in 2 days.

Thanks for checking in.

Comment on Desert Willow, Columbus Grove, Irvine by ockurt

ockurt — Fri, 03 Jul 2009 13:20:10 -0700

Ha ha ha ha!

Maybe they’d airship if they wanted it bad enough?

Comment on Desert Willow, Columbus Grove, Irvine by ockurt

ockurt — Fri, 03 Jul 2009 13:12:56 -0700

I toured these places when I lived across the street in Westpark and I think most of the upgrades were completed by the builder so this flipper probably hasn’t done squat to the place other than calling the maids to clean (if that!)

Comment on Desert Willow, Columbus Grove, Irvine by ockurt

ockurt — Fri, 03 Jul 2009 13:10:24 -0700

That’s a pretty good one Dave…where do you come up with these ideas?

Is it beer-thirty over there is AZ?

Have a good weekend!

Comment on Desert Willow, Columbus Grove, Irvine by CapitalismWorks

CapitalismWorks — Fri, 03 Jul 2009 13:00:32 -0700

This is troll.

Comment on Desert Willow, Columbus Grove, Irvine by CapitalismWorks

CapitalismWorks — Fri, 03 Jul 2009 12:58:47 -0700

The is a KFC on PCH in CDM.

Comment on Desert Willow, Columbus Grove, Irvine by newbie2008

newbie2008 — Fri, 03 Jul 2009 11:38:12 -0700

Dan at least the flipper is removing it from the taxpayer paid bailout of the bank to an “investor” who will either make a profit or a loss. Hope it not GS, etc., then the profit will be private and the loss socialized on the backs of the taxpayer.

some more green shoots:
http://www.rgemonitor.com/687/Real_Estate_and_Mortgage_Finance?cluster_id=12859

Not as bad as expected only 2.9% of prime loan are seriously delinquent.

NR: 40% with loans are underwater.

A TR FC was only ~9% underwater (looked like no DP purchase). The bank people emptied the junk left over last week. Family had an orderly move out the two weeks earlier. No for sale sign yet.

http://www.financialtrustindex.org/images/Guiso_Sapienza_Zingales_StrategicDefault.pdf

Looks like the authors may be describing the start of similar situations in TR and Newport Beach. More on the negative price trigger instead of the percentage trigger. The average American has moral and social constraints against strategic defaults that companies have been doing for the last decade.

Comment on Desert Willow, Columbus Grove, Irvine by Dan in FL

Dan in FL — Fri, 03 Jul 2009 10:49:08 -0700

Agreed on the market timing. You DO want to time the market…you just don’t want to try to hit the EXACT top or the EXACT bottom. 5% variations are fine. 20-30% downside is not fine.

As for the flippers, I’ll disagree with the idea that they are clearing up the foreclosures. This house is still on the market, isn’t it? The only way to clear out inventory is to find long term owners. These guys are just retailers. Why buy from the retailer when you can buy from the wholesaler for cheap?

Comment on Desert Willow, Columbus Grove, Irvine by zubs

zubs — Fri, 03 Jul 2009 10:26:48 -0700

gay doods have double the male income, thus more money.

Comment on Desert Willow, Columbus Grove, Irvine by newbie2008

newbie2008 — Fri, 03 Jul 2009 10:11:48 -0700

Almost all stock people say don’t try to time the market. Almost all the stock people are market timers themselves. Do you want to buy GE for $100 today? I don’t think so. GE at $100 is not a good time to buy. The price does not support the earnings. Being a market timer doesn’t mean buying a the lowest point. Just at a reasonable price and trying to avoid an almost certain loss.

How much was the outstanding loan on this house? What was the discount on the house?

The house is nice looking. The flipper might make a profit or not. Auction buyers help clear up the FC/excess debt problem. Cash and not another bad loan for the bank. Is the buyer a RE agent to lessen the selling cost?

Soylent Green Is People and NoVas… BTY: Inglewood was a up and coming place in the late 1950’s and early 1960’s. Lots of expensive stores and great jobs. Inglewood was special.

Comment on Desert Willow, Columbus Grove, Irvine by lawyerliz

lawyerliz — Fri, 03 Jul 2009 09:38:37 -0700

Happy July 4th everybody.

Comment on Desert Willow, Columbus Grove, Irvine by lawyerliz

lawyerliz — Fri, 03 Jul 2009 09:35:29 -0700

It’s a nice house, but not at that price.

Hey Californians, is there fear on the streets yet?

Comment on Desert Willow, Columbus Grove, Irvine by lawyerliz

lawyerliz — Fri, 03 Jul 2009 09:33:41 -0700

I think you should write a haiku about it Solent.

Unless you are haiku-ed out?

Comment on No Prayer, Sandburg, University Park, Irvine by tonye

tonye — Fri, 03 Jul 2009 09:18:20 -0700

I dunno know. I got terabites of RAID5 and lots and lots of bandwidth.

I guess, it’s there?

My numbers were to store at least 1000 DVDs (7GB per) and 4000 LP (24/96 => 1.2GB per) and then to plan that BlueRay/HD-DVD would come in at around 20GB each.

Plus streaming no less than four HDTV 1080p simultaneously from edge to edge of my home network.

Bandwith and storage are getting very cheap, so I installed lots of wire when I had the walls opened.

Wired will always surpassed wireless by at least two orders of magnitude.

Comment on No Prayer, Sandburg, University Park, Irvine by tonye

tonye — Fri, 03 Jul 2009 09:14:19 -0700

Not really, you can not do GigE over 802.11n.

802.11g/n are fine for client machines that won’t do too much heavy duty file transfers… YOu should always wire your servers for performance and security.

Comment on Desert Willow, Columbus Grove, Irvine by dafox

dafox — Fri, 03 Jul 2009 09:13:12 -0700

If there’s 102 buyers for every house in west LA, why is there no difference in the days on market between Irvine and West LA?

West LA days on market: 98
Irvine days on market: 99

As Piggington says: In God we trust. Everyone else bring data.

Comment on Desert Willow, Columbus Grove, Irvine by tonye

tonye — Fri, 03 Jul 2009 09:10:59 -0700

You’re wrong, IMHO.

A big home like this would be perfect to rent. Can you imagine how many illegal aliens you could put in there?

The only problem is that you will need to figure out how to park ten clunkers.. I guess if you could make a drivethru you could pour concrete on the backyard and they could park and fix at least then trucketas back there.

Let me see… five familes, @ 800 bucks a month rent, that’s about 4000 per month. You’ll need to add a fifth bathroom (one per family) and enclose the garage into additional bathrooms..

Do able.

Columbus Grove… Irvine’s new working community. Heck, they could take the bus to work on TR.

Comment on Desert Willow, Columbus Grove, Irvine by tonye

tonye — Fri, 03 Jul 2009 09:06:08 -0700

Won’t work.

The resulting gridlock from Santa Monica Bay to Moreno Valley would prevent fresh sushi from reaching Riverside County.

With no organic, low fat, brown rice futomaki how would you feed those transplanted Santa Monica residents? They’d be back on San Vicente Blvd within six months.

Comment on Desert Willow, Columbus Grove, Irvine by Walter

Walter — Fri, 03 Jul 2009 08:46:48 -0700

I say both of you are right. Keep dumping superfund product on a declining market and you get CG.

Comment on No Prayer, Sandburg, University Park, Irvine by mav

mav — Fri, 03 Jul 2009 08:43:03 -0700

one of the biggest mistakes people make when deciding what to invest in and when…. is transaction data….. it is virtually worthless, and will lead to bad decisions, better to look at future outlook. The unemployment picture, income pressures, and notice of defaults will give you the data you need to make your decision.

Comment on Desert Willow, Columbus Grove, Irvine by Walter

Walter — Fri, 03 Jul 2009 08:41:45 -0700

But these other areas lack the glamor of flipping in Irvine.

I have been to see a handful of properties in beaten down areas. The average Irvine socialite would fear for their life in those areas.

Comment on Desert Willow, Columbus Grove, Irvine by Walter

Walter — Fri, 03 Jul 2009 08:34:43 -0700

Your command of the force is strong, but the force of the market may be stronger.

Comment on Desert Willow, Columbus Grove, Irvine by tonye

tonye — Fri, 03 Jul 2009 08:33:49 -0700

“Soylent Green… my kind of People”, Bender The Robot.

This house is not on the flight path to John Wayne. The flight path is north, alongside the 55 and then crossing over the industrial park between the 55 and Red Hill.

In fact, the flight path to John Wayne is quite a bit north from ALL Irvine houses. Santa Ana and Tustin are a different story.

The beach areas are LAX are nuts! Smelly Gundo… yuck!

Comment on No Prayer, Sandburg, University Park, Irvine by jimfromJaxFla

jimfromJaxFla — Fri, 03 Jul 2009 08:28:33 -0700

Great comment Dan..
The past shows I have watched rarely ever showed a closing and the net profit.. some have even mentioned the sellers couldn’t sell and ended up renting out the homes. Even those that had them up for sale, the shows seldom mentioned the closing costs and Real estate commissions in these estimates of profit.. not to mention the fact many of these “Investors” quit their jobs making say, $5000 a month.. if it takes 6 months to sell, there’s more lost $$$$$$$... oh, then there are TAXES on the profit.. ouch..

Comment on Desert Willow, Columbus Grove, Irvine by tonye

tonye — Fri, 03 Jul 2009 08:28:32 -0700

Nancy might be right.

The traffic on LA’s West Side is gridlocked. There really is no way to go file miles under an hour except during “drunk hour”.

So maybe the locals haven’t heard about market declines because they’re all stuck in their SUVs with the radio tuned to KFWB listening to Michael Jackson’s “news”.

To be serious, though, Nancy is full of it. Just last week (two weeks?) ago the LA Times ran a column about the market on the West Side. It’s hosed.

Comment on Desert Willow, Columbus Grove, Irvine by mav

mav — Fri, 03 Jul 2009 08:23:47 -0700

My philosophy is at least 1 years living expenses in cash, in addition to your long terms savings and 401K….. but you can adjust based on your risk tolerance. At the end of the day it’s all about jobs and your particular job outlook if you are not independently wealthy.

Comment on Desert Willow, Columbus Grove, Irvine by tonye

tonye — Fri, 03 Jul 2009 08:22:05 -0700

yeah.. David doesn’t realize that KFC don’t do it West of the Santa Ana Fwy (I5).

I think I better let him know that this Faux Chateaux is about a mile or so from Costo… so instead of KFC, that would be a take out Rotissery Chicken from Costco. Or maybe a pizza… or maybe a polish dog… but KFC? no way man….

Comment on Desert Willow, Columbus Grove, Irvine by winstongator

winstongator — Fri, 03 Jul 2009 08:10:15 -0700

The conventional RE wisdom seems to be trade-up-up-up, ignoring the idea that you don’t want to have your most expensive home when you’re retired. Personally, we are waiting to ‘trade-up’, and I’m trying to figure out when someone in either trade-up/down would be best to wait in either rising or falling markets. I figure if our home is $X and we are looking at 2-3X a 10% overall decline would be a net gain of .1-.2X. I’m thinking wait to buy on the downturn, but sell quicker on the upturn. That just works out to lean towards the less expensive home, and a roundabout way of realizing I’m cheap.

Comment on Desert Willow, Columbus Grove, Irvine by OC Progressive

OC Progressive — Fri, 03 Jul 2009 08:04:38 -0700

The supply of people who can afford 3,000+ square foot homes for around a million is finite and shrinking, as a downward spiraling economy combines with tighter lending standards.

What we’ll continue to see is a buyer’s market, where the small number of people in this market have a very wide range of choices, and tremendous leverage.

Who really needs a house this big?

Lots of folks have been concerned about sustainability, predicting Peak Oil, Peak Soil, and Peak Debt (which appears to have won the race).

Places like Columbus Grove may represent Peak House.

As people scale back to what’s affordable, and these 3000+ square foot houses on 5,000 foot lots will become the deadest section of the market, while buyers with money will focus on much smaller houses that are easier to maintain, clean, heat, and cool.

Comment on Desert Willow, Columbus Grove, Irvine by Surfing in Newport

Surfing in Newport — Fri, 03 Jul 2009 08:01:32 -0700

I can’t remember who said it, I think it was one of my professors. Anyway, when you buy something on the open market you will pay $1 more than the next biggest fool. He was talking about business acquisitions, but the same goes for buying on the court house steps. If there isn’t something that is special just for you and nobody else, then chances are that the price is going to be bid up to where only a fool would buy it.

Don’t look to time a market…although it’s usually easy to spot if a market is rising or failing, it’s those damn peaks and troughs that are hard to spot. Look at the value of ownership vs. renting.

Comment on Desert Willow, Columbus Grove, Irvine by no_vaseline

no_vaseline — Fri, 03 Jul 2009 07:57:37 -0700

IR is wrong.

This property is headed down the toilet because Columbus Grove is a shithole built on a superfund site. Oh, and it’s under the flightpath for John Wayne.

(hat tip SG)

Q: What’s the difference between Columbus Grove and Inglewood?

A: Inglewood has a casino.

Comment on Desert Willow, Columbus Grove, Irvine by winstongator

winstongator — Fri, 03 Jul 2009 07:56:01 -0700

As our family combined salary would now qualify us for this price home, we do not have nearly 190k saved for a DP. I’m wondering how much as a % of cash savings or net worth people should or do put towards a DP. If we did have a 200k emergency fund, I wouldn’t want to put it all into one basket. I know in the bubble people just took the gain from one home and traded up, and others just used 100% financing.

One thing that is related to market timing is liquidity. People were excessively long real estate and stocks in the bubble, and short liquid savings. People neglected the rainy day fund to make the payments or play the market. Things turn and you’re stuck. It’s counterintuitive, but you should put more into your rainy day fund when it’s sunny, because you only draw it down when it rains!

You don’t need to time the market perfectly, but 20% YoY gains should raise eyebrows.

Comment on Desert Willow, Columbus Grove, Irvine by AZDavidPhx

AZDavidPhx — Fri, 03 Jul 2009 07:52:45 -0700

Thanks for the laugh, Kirk.

Comment on Desert Willow, Columbus Grove, Irvine by mav

mav — Fri, 03 Jul 2009 07:47:58 -0700

Market timing also requires some degree of wealth and/or a great degree of risk. As the housing decline progresses doom and gloom will fill even the Nancy’s and Janet’s of the world. The wealthy have a cushion to survive and prosper in the periods making bets when others can’t…. less wealthy investors need to be willing to take on the risk that things can get even worse and they can lose everything.

Comment on No Prayer, Sandburg, University Park, Irvine by Cara

Cara — Fri, 03 Jul 2009 07:45:09 -0700

Whoever’s buying now is not reading this blog. A week or so back one of the seller’s came on. “Property Owner”. IR had profiled him partially because he had taken out little to no home-equity in loans (I don’t recall if it was next to nothing or nothing). He came on and was nice and countered people’s arguments against his neighborhood and the citing of his house well. Sadly, I don’t think it’s going to help because pretty much, people who are on here don’t like today’s prices. But, given the comps in his neighborhood it shouldn’t matter, he was priced appropriately for the market.

Did you ever find the spreadsheet of closings in Irvine? If you click on forums and search for spreadsheet you’ll find it, directly in excel format.

IR, Ipop, anyone, IR has contended that the size of downpayments is decreasing. But there’s so much scatter in individual transactions that that’s not visually clear from the excel file in table form. Can someone please make it into a scatter plot by date with a running average or something and post it to the main blog? You could break it down by price tier, or do it both by percentage DP and by dollar amount. Thanks!!!!

Comment on Desert Willow, Columbus Grove, Irvine by Nancy

Nancy — Fri, 03 Jul 2009 07:40:50 -0700

To reverse the downturn in the housing market the government needs to replicate West L.A. If you took everything that is West L.A and placed it in Riverside, property values would surely follow. By everything I mean the great people, restaurants, and entertainment. If you transplanted a few longtime Santa Monica residents and put them on any block in any neighborhood in Riverside, the community would improve starting with the block in which the Santa Monica residents were first placed. It would look similar to an atom shockwave as it spreads out from the center, but in a positive way. I have written a letter to president Obama asking the he study my proposal.

Comment on Desert Willow, Columbus Grove, Irvine by thrifty

thrifty — Fri, 03 Jul 2009 07:39:35 -0700

Nancy: you need to give us your zip code. There is money to be made there. I wouldn’t venture outside of it, however; there is a big recession surrounding you.

Comment on Desert Willow, Columbus Grove, Irvine by Gemina13

Gemina13 — Fri, 03 Jul 2009 07:18:40 -0700

So that’s why so many McMansions have those kind of floors. Their owners belong to the Sith!

. . . or maybe they’re just geeks.

No, wait, they’d need brains to be geeks. Definitely Sith.

Comment on Desert Willow, Columbus Grove, Irvine by Soylent Green Is People

Soylent Green Is People — Fri, 03 Jul 2009 07:18:00 -0700

Over $900k to live in a flight path. In how many years will this area begin to look like Inglewood? Yes, it’s a planned community. Yes still. It’s in a flight path! At least the beach areas bordering LAX have the beach to fall back on. What does this flatland have that other areas do not in this price range? I can think of a few… lower taxes, bigger lots, low or no HOA, peace and quiet…. What people pay today to live in OC is a mystery to me.

Comment on Desert Willow, Columbus Grove, Irvine by IrvineRenter

IrvineRenter — Fri, 03 Jul 2009 06:57:34 -0700

The people who claim you cannot time the market are generally those who need to make a living from market transactions. They need people to buy and sell even when it is not in their best interest to do so.

Market timing is very difficult for most people because it generally requires people to act opposite of what their emotions tell them (see Speculation or Investment?). Even the pros do not time the market perfectly, and many completely miss the turning points, but it certainly is possible to take advantage of market timing to improve on buy-and-hold investing.

Comment on Desert Willow, Columbus Grove, Irvine by Dan in FL

Dan in FL — Fri, 03 Jul 2009 06:56:46 -0700

This sounds like the “hacked” Nancy again.

Comment on Desert Willow, Columbus Grove, Irvine by IrvineRenter

IrvineRenter — Fri, 03 Jul 2009 06:53:41 -0700

Yes, it is different there because everyone wants to live there and they are running out of land. If you don’t buy now, you will be priced out forever.

Comment on Desert Willow, Columbus Grove, Irvine by Nancy

Nancy — Fri, 03 Jul 2009 06:48:36 -0700

If this house was in West L.A. the price would never have come down. There are 102 buyers for every house that is put on the market in West L.A.

Comment on Desert Willow, Columbus Grove, Irvine by IrvineRenter

IrvineRenter — Fri, 03 Jul 2009 06:44:54 -0700

Oops! Spell checkers don’t catch mistakes like that one.

Comment on Desert Willow, Columbus Grove, Irvine by Lee in Irvine

Lee in Irvine — Fri, 03 Jul 2009 06:38:31 -0700

It’s a race against the clock.

Comment on Desert Willow, Columbus Grove, Irvine by movingaround

movingaround — Fri, 03 Jul 2009 06:34:20 -0700

Wow - best upgrade yet!

Comment on Desert Willow, Columbus Grove, Irvine by Lee in Irvine

Lee in Irvine — Fri, 03 Jul 2009 06:31:09 -0700

Even if this flipper does get $949,000 for this house, the damage to the neighborhood is significant. This is a certified Comp Killer.

I don’t know why any investor would take a chance at something priced in this range. There are better opportunities now outside of Orange County.

Comment on Desert Willow, Columbus Grove, Irvine by winstongator

winstongator — Fri, 03 Jul 2009 06:16:09 -0700

What is IR really trying to do & say? The amount one pays for a home, and their ability to service the debt associated with the home are very, VERY important. Warren Buffett is a buy and hold investor, but he would laugh at you if you said the price you buy an asset at isn’t important, and would laugh louder if you wanted to fund your purchase with debt you could not easily service. What is a good investment at $50, is not as good an investment if it costs $100. Buy that $100 asset with debt, and it can be doubly dangerous.

Some have the notion that you should not try to market time, and would probably use stock market timing as a counter-example. The big difference between buying a home and investing in stocks is that with a home, you are committing to an asset price for 15 or 30 years, while long term stock investors are only committing 1/30th of their money each year. If one year is excessively bubbly, they only lose a fraction of 1/30th of their money. While money you put in in 2007 has Dow-wise lost 40%, money you put in in 2003 is down 10%.

Nothing is ‘always’ a good investment or buying decision. If something really was, someone else would come in and put money into it taking out the easy money.

Comment on Desert Willow, Columbus Grove, Irvine by Dan in FL

Dan in FL — Fri, 03 Jul 2009 05:56:56 -0700

I was wondering when the KFC bucket would return!

Comment on Desert Willow, Columbus Grove, Irvine by mav

mav — Fri, 03 Jul 2009 05:55:41 -0700

The flipper bought it for $740K and that’s about what it will be selling for in 2015. Now it’s time to find the sucker…. I’m willing to bet they do… one with a couple hondo grand in cash no less.